Logum Logistica, on Wednesday, August 25, announced it had successfully transported its first ethanol export to California using pipeline, Reuters reported.
The Brazil-based logistical company transported 40 million litres of the biofuel from the production region to the port, using a combination of short trucks and their pipeline system.
According to Logum, they transport their first ethanol export deal from a terminal located in Ribeirao Preto, the main ethanol and sugar belt, to Ilha D’Agua port terminal located in Rio de Janeiro, covering a total of 745 km (462.92 miles).
With the rising global calls for emissions reduction, transporting ethanol using pipelines beyond economies of scale and a smaller cost is a smart move that helps cut down the logistical expenses and cares for the environment.
The company said the entire operation prevented the emission of an estimated 2,000 tonnes of carbon that could have otherwise been released into the environment if the biofuel was transported entirely through roads using 700 trucks.
Also, the company revealed the operations were possible due to a lucrative price premium per every 1,000 litres of imported ethanol given by the California government for cane-based ethanol and other biofuels transported through infrastructures with lower carbon emissions.
“The California program foresees a premium of up to $8 per 1,000 litres of ethanol,” the company said in a note. The Brazil-based company has invested in the pipeline to transport fuel in Brazil and leverages the robust trade between the U.S and Brazil to grow their business beyond borders.
Being the two largest ethanol producers and consumers, the U.S and Brazil enjoy a symbiotic trade. Brazil ships ethanol from their cane mills to California using the environmental premiums, while the U.S ethanol makers export their ethanol to the Northeast region of Brazil.